AMD expects processor market to expand 5%

Advanced Micro Devices Inc, Intel Corp's main rival in personal-computer chips, expects the market for processors to grow about 5 per cent this year. In the first half of the year, the PC market will experience "headwinds" from shortages of hard-disk drives, chief financial officer Thomas Seifert said yesterday in a presentation to analysts at the company's California headquarters. PC component makers are still reeling from last year's Thai flooding, which cut production of disk drives and rippled through the industry. AMD said last month that its first-quarter sales would decrease as much as 11 per cent from the previous three months. That indicates revenue of as little as $1.5 billion (Dh5.5 billion), missing the $1.6 billion predicted in a Bloomberg survey. AMD is aiming for a gross margin — the percentage of sales remaining after deducting the cost of production — of 44 per cent to 48 per cent. That target excludes certain costs. The company also said it's readying an "ultra-low power" chip for tablet computers this year. AMD shares rose less than 1 per cent to $6.93 at the close in New York on Thursday. The stock has climbed 28 per cent this year. Focus on SOCs Separately, the company said it will shift its strategy to focus on supplying so-called system on chips, or SOCs, said AMD's new chief technology officer, Mark Papermaster. SOCs are single chips that combine the functions of multiple semi-conductors onto one piece of silicon. The new initiative will help speed up the pace at which AMD brings its products to market and allow the incorporation of other companies' technology alongside its own in more customised offerings, Papermaster. While AMD won't produce products designed to push into the crowded smartphone business, it will make processors that need less power, helping it tackle the growing market for tablet computers and thinner, lighter laptops, he said. Future AMD products might include its own processor and graphics components working with a processor based on ARM Holdings technology. To take advantage of the rapid growth of tablets and new types of laptops, AMD needs to introduce new products faster, Papermaster said. "We can't play in these opportunities on the pace we were at," he said. Papermaster joined AMD in October. He previously worked at Cisco Systems, Apple and IBM.